§ Order for Second Reading read.
§ 3.38 p.m.
§ The Secretary of State for Scotland (Mr. John Maclay)
I beg to move, That the Bill be now read a Second time.
Nearly five years have passed since the last major Housing Bill in 1957. In that time, about 140,000 new houses have been built in Scotland, enough to rehouse close on half a million people. The total number of houses built since the war is also approaching the half million mark, but, of course, the task is a continuing one and the major objective remains that everyone with a genuine need for a house should be able to obtain one at a cost which he can afford. The time has come, however, to reassess the position and to see what changes are called for in the light of progress during the last five years.
For many years after the war, the compelling need in Scotland was to build just as many houses as possible in every part of the country. The need for that first and almost indiscriminate rush of building has ended and it is now clear that the remaining housing problems differ in kind and in extent as between one area and another. Our job now is to make certain that the resources available are put to the best use by being channelled where the need is greatest.
In the words of the White Paper on Housing in Scotland, which was presented to Parliament recently:There is no longer, in fact, a single housing problem, but rather a series of particular and local housing problems. In some parts of the country there may no longer be any serious housing needs still unmet; elsewhere, however, there are still urgent problems which call for a sustained and imaginative effort.In so far as these problems fall to be met by local authorities, some are better able financially to tackle their problems than others. This is largely because some authorities have a larger number of houses which were built when costs were low, while others have a high proportion of houses which were built when costs were high. Accordingly, the average annual outgoings per house are much higher in some areas than in others, and 1358 subsidies have been at different levels at different periods, with the result that the average subsidy payable per house varies. Moreover, rateable values and rate burdens vary greatly from one area to another. The authorities with large programmes of building still ahead of them are not always those best placed financially to undertake these programmes, and it is primarily to help these heavily burdened authorities that we are proposing to redeploy the Exchequer assistance to housing. 1 shall discuss the details of these proposals later.
If the present situation calls for a redistribution of subsidies to local authorities, it also demands that we should make use of all available building agencies—not only local authorities—in the provision of housing throughout Scotland. Between 1945 and 1960, only 10 per cent. of the houses built in Scotland, compared with 36 per cent. South of Border, were built by private enterprise. The rate has been increasing in recent years, but the proportion is still inadequate and still well below that in England and Wales. Most disappointing of all has been the virtually complete lack of private building for letting. This means that the many people who are unable, or do not want, to buy their own house, but do not need—or want—to live in a subsidised house, are not having their needs satisfied.
There is no need to assume that local authorities must build for such people, but someone must do so. That is the background to my proposal that Exchequer advances should be made available to housing associations which are building for letting at economic rents or for "joint ownership" on the pattern which has been so successful in Scandinavia. I shall have more to say about that later. At present, Scotland has, in some respects, an unfortunate public image. Years of over-dependence on heavy industry and of relatively high unemployment have conjured up in the minds of some people who do not really know what is going on a totally false impression of the country as a depressed, backward area, with shabby tenements and unattractive, low-rented, subsidised houses.
I am sure that hon. Members on both sides of the House are concerned to dispel this image, to attract new and more varied 1359 kinds of industry, to give more employment and to encourage in every way new economic enterprise and initiative. I say quite frankly that I do not believe that we shall ever do this unless we encourage equal enterprise and initiative in the provision of houses. The skilled workers that we want will not move willingly if we cannot offer them the kind of house that they want.
There has been a great rise in real incomes since the last war. As more and more people own cars, television sets, and the like, more and more people want to own their own houses or can afford to pay unsubsidised rents. Naturally, we all welcome this. But we must recognise that this is a continuing process, and that means that in a sense there is no final solution to the housing problem; all the more so since, as standards rise, the rate of obsolescence accelerates and people demand not only more, but better, houses.
Local authorities must adjust themselves to these changing demands. As I have said before, housing should not become the monopoly of local authorities or of any other single agency. That is very far from implying that major housing tasks should not continue to be undertaken by local authorities. Indeed, I believe that, if private enterprise is able to satisfy the demand for unsubsidised housing, then local authorities will be the better able to concentrate on providing subsidised houses for those who need them. They will be left free to attack the special problems of slum clearance, overspill, and so on, which they are best placed to tackle. In short, public and private house building are not mutually exclusive. They could, and should, be complementary to one another, each fulfilling the tasks most appropriate to it.
No matter how far we try to solve Scotland's remaining housing problems by a redistribution of subsidies and by the encouragement of building for economic letting, we shall fail until the rents charged for local authority houses reach a more reasonable level.
These are really the main considerations underlying the Bill: the great disparity in housing need between local authorities; the lack of building in Scotland by agencies other than local authorities, and especially of private building for letting; and the continuing policy of 1360 too many local authorities charging unreasonably low rents. When I come to the details of the Bill I shall deal with the physical problems which still face us—the need to stimulate slum clearance, the improvement of our older houses, and the provision of houses especially designed for old people.
Before I explain the detailed provisions of the Bill, perhaps I may make a general comment on the reasoned Amendment which stands on the Order Paper in the name of the right hon. Gentleman the Leader of the Opposition and some of his hon. Friends. The Amendment refers in the first place to the Bill's failure todeal with the problem of interest rates or to provide the local authorities and other public agencies with the means greatly to increase the supply of houses in Scotland.I do not propose, in this speech, to go into the old story of high and low interest rates. [HON. MEMBERS: "Why?"] I had occasion to speak on that subject only a very short time ago. One thing, however, that I want to say is that the new subsidy structure in the Bill is designed to give increased Exchequer assistance to those local authorities which are most heavily burdened, either because they have to build more houses or because their houses cost them more. I therefore hope that the Bill will encourage authorities with large housing needs still to meet; and I am sure that the subsidies now provided, combined—I must emphasise this—with the resources available to them in rents and the rate contribution, will supply the means required to meet those needs.
The Amendment also refers to the "excessive discretionary power" which the Bill gives me and to the "financial uncertainty" to which it will expose local authorities. In this connection, I think that the hon. Member for Kilmarnock (Mr. Ross) will at some stage today use a phrase which I have heard him use before, a quotation from my earlier days. I may touch on those points to which I have just referred in my speech, but my hon. Friend the Under-Secretary of State will be able to deal, in his winding-up speech, with any evidence that hon. Members opposite are able to put forward in support of these allegations. But I do not myself know how they can possibly be justified.
§ Mr. Maclay
I am awaiting for hon. Members to give it, When we have heard it, we shall deal with it.
The first part of the Bill contains the new subsidy proposals. The kernel of these is to be found in Clause 3, which lays down a new form of "resources test" to be applied to each local authority each year. If this test shows that an authority's resources are less than adequate to its commitments, it will get a subsidy of £32 per house in place of the present £24. If the authority's resources are particularly inadequate—the details of this matter are to be found in the Second Schedule—it will get supplementary payments up to a total of £56 per house.
lf, on the other hand, its resources are shown by the test to be adequate, it will get a lower rate of subsidy of £12. If as a result of continuing building an authority's commitments outstrip its resources, it will be able to move up from a lower to a higher rate of subsidy.
§ Mr. A. Woodburn (Clackmannan and East Stirlingshire)
I have been a little puzzled to know what happens to the people who are neither black nor white. Presumably, there will be a big gap between the two types of authority who are the ideal cases for the higher and lower rates of subsidy. What will happen to the marginal authorities which it is difficult to say are in one category or the other?
§ Mr. Maclay
The right hon. Gentleman will find that the marginal cases are dealt with in the Bill. If I do not pick up the point as I go along, it can no doubt be explained later.
The mechanics of the resources test are described in the White Paper. Essentially, the idea is to take each authority's housing revenue account for the latest available year, but to adjust it by substituting for the actual income from rents and the rate fund contribution a notional income from these sources related to the gross valuation of the houses in the account. If the adjusted account shows a deficit, the higher rates of subsidy will be payable—£32 or up to £56 if the deficit is exceptionally large. If the account shows a surplus, the lower rate of £12 will be 1362 payable. If, however, the surplus is purely marginal as defined in Clause 3 (5), the £32 rate will be payable. This, I think, is the point raised by the right hon. Member for East Stirlingshire (Mr. Woodburn).
The working of this new test turns, of course, on the notional income from rents and the rate fund which is substituted for the income actually received. For this purpose, we have the new independent assessment of fair market rents of the main assets of each authority—that is, the houses themselves—in the form of the new valuations under the Valuation and Rating (Scotland) Act, 1956. Clearly, the notional income from rents plus the rate fund should not be less than the total of these valuations. The valuations, however, have themselves quite properly been influenced by the long-standing tradition of low rents in Scotland. We have, therefore, provided that where the average valuation in any area falls short of £60 the notional income per house should be set, not at that average, but at that average increased by one-half the amount by which it falls short of £60.
Since the average valuation of local authority houses in Scotland is about £46, this means that we are assuming an average income from rents and the rate fund of something like £53 per house—that is, half the difference between £46 and £60. The actual figure will, of course, vary for each local authority and there is power in the Bill to alter the figure of £60 if at any time changing circumstances should make this desirable.
There seems to have been some misunderstanding of this proposal, so I must emphasise that the subsidy structure, does not dictate the actual level of rents charged by a local authority. It will still be for each local authority, as at present, to decide how much of its expenditure should be met from rents and how much from the rate fund, but, in fixing rents, local authorities must, of course, hold the balance fairly between their tenants and the general body of ratepayers, as was emphasised in the reports on the Glasgow and Dunbarton rent inquiries.
Provision for the supplementary subsidies for local authorities who are shown to need more than the higher 1363 basic subsidy of £32 is made in the Second Schedule. This is an emergency provision designed to help the most heavily burdened authorities, and there is, therefore, a preliminary requirement that to qualify for these supplements an authority must have a rate burden above the average for Scotland. The supplements of £8, £16, or £24 then become payable according to the size of the notional deficit on the housing revenue account. With a maximum subsidy, basic and supplementary, of £56, it is thus possible under the Bill for an authority to receive more than double the £24 which it receives at present for the normal run of its houses. This is the practical demonstration of what I mean when I say that we are endeavouring to channel assistance into those areas which need it most.
The reverse side of the coin, of course, is that some authorities will drop from £24 to £12 subsidy. I have no doubt that the authorities concerned will not like this, but I should like to make two points about it. First, any authority which qualifies only for the £12 rate must have adequate resources to fulfil the housing task which it faces and there really can be no justification for giving such authorities, at the taxpayers' expense, a subsidy which is not shown to be necessary. Indeed, it could be argued that if their resources are shown by the statutory test to be adequate, there is no case for paying them any subsidy at all.
After all, the more assistance that is given to these better off authorities, the less must be available for those authorities that are badly in need of it. Secondly, under the arrangement made in this Clause, an authority on the lower rate of subsidy knows that if it uses up its surplus resources by continued building, it will qualify for the higher basic subsidy and, in time, if its needs warrant this, it could qualify for the supplementary subsidies as well. These basic subsidies will be available like the present subsidy of £24 for such categories of approved need as slum clearance, overcrowding, old people's houses, and so on, but certain special subsidies will be retained for particular needs.
Clause 2 of the Bill deals with two of these subsidies: that for building for 1364 overspill by local authorities and that for incoming industrial workers. These subsidies will be payable at a flat rate as an alternative to the subsidies at different rates under Clause 3.
The subsidy for overspill building will remain at the rate of £42 per house. Since this subsidy for local authorities was introduced in 1956, overspill building has continued to increase. Thirty-four overspill agreements have been approved, three of them within the past three months. The total number of houses promised under those agreements is over 7,400, quite apart from the additional houses to be provided by the Scottish Special Housing Association in conjunction with the local authorities' own overspill building programmes.
§ Mr. Maclay
My hon. Friend the Under-Secretary will give that detailed information when winding up the debate. I did not wish to burden my speech with too many detailed figures.
Clause 2 also provides flat rate subsidies for houses built by housing associations and by development corporations acting as housing associations. This is necessary because the resources test under Clause 3 is not applicable to housing associations, which have, of course, no rating resources. I hope that this increase in subsidy will give further encouragement to the work of housing associations, which have not yet, I am sure, reached the full measure of what they can contribute to the solution of our housing problems in Scotland.
The other special subsidy provided for in Clause 2 is the subsidy on housing built to meet the urgent needs of industry. This has been raised from £30 to £32 per house and it is our hope that it will encourage that mobility of industry which is so necessary if the new industrial pattern of Scotland is to develop to the full.
I should like now to deal with the subsidies provided for in Clauses 4 to 7, which are additional to the appropriate rate of basic subsidy. Clause 4 ensures that special subsidy will continue to be paid on houses provided for agricultural workers. Previously, the subsidy was at a flat rate of £36. Now, it is to be £12 1365 additional to the basic subsidy, thus retaining the previous differential.
Clause 5 changes the basis of the subsidy for high flats. When this was introduced in 1956, not much was known about costs of high building in Scotland and the subsidy was in the nature of an experiment. Since then we have learned a lot about these costs, enough to allow us to pay the subsidy as a fixed additional amount instead of on a complicated formula related to the cost of each individual project. We shall now be able to cut out the detailed scrutiny involved in a variable subsidy, and thus save a great deal of administrative time. The rate of £40 is, in fact, the average amount which local authorities have received under the existing formula.
§ Sir Myer Galpern (Glasgow, Shettleston)
While that has been the average sum receivable by the local authority, could the right hon. Gentleman tell us whether this £40 flat rate subsidy will compensate for the additional cost of going upwards, or whether the local authority is left to bear some of the addition al costs because of the shortage of virgin sites?
§ Mr. Maclay
It is an average. I should just like, to check very carefully on that point before giving a categorical statement in answer to it, but the point is that the figure is almost what the local authorities have been receiving.
Clause 7 introduces a new subsidy for houses built on expensive sites. Local authorities are increasingly turning to the central areas in our towns where the costs of development can be high. I think that this is a move which we would all welcome. The hundreds of thousands of houses which have been built since the war have too often been in big estates on the outskirts of our towns, involving long bus rides to places of work and of entertainment and, an important point, to the homes of relatives, especially the old people, who were left behind when the young families moved out. One of our biggest tasks in the next few years will be to restore life to our deserted, sometimes even derelict, town centres; what is known as urban renewal and redevelopment.
I feel sure, therefore, that it is right to provide this additional subsidy for authorities who have to build on un- 1366 usually expensive sites. It will be paid, in addition to other subsidies under this Bill for houses built on sites with a developed cost of more than £4,000 per acre. Together with the amendments to slum clearance procedure in Part III of the Bill, it should be a real encouragement to local authorities to tackle the slum clearance and the redevelopment problem with even more energy than before.
I mentioned earlier that another particular problem was the building for small families, especially old people. Clause 10 extends the definition of "house" to make clear that the full rates of house subsidy will now be paid for groups of small flatlets, specially designed for old people, with some communal facilities and services. These are particularly suitable for older people who are too frail to live in complete independence in a house, but who are able to look after themselves in accommodation where household chores are cut to a minimum and where the help of a resident warden is readily available. I very much hope that this subsidy will encourage experiments in Scotland with this type of accommodation, which can provide a useful halfway house between complete independence and life in an old folk's home.
All these new subsidies will be payable for houses for which tenders or estimates were or are received in my department on or after 1st November this year, and will as before be payable for a period of sixty years. But by Clause 8 (2) I am giving notice of the possibility that subsidies under the Bill might be adjusted, both in relation to amount and duration of payment, at some time during the period of sixty years.
This power cannot be used till a period of ten years has elapsed from the passing of this Bill, and any Order which is made under this Clause will be subject to affirmative Resolution of this House. It is the Government's intention that this power should be used only if there were such a major change in the economic circumstances of the country and the community that it would be unreasonable to maintain the present rates of subsidy. It might well be that, in practice, legislation would be required to meet the change in circumstances.
1367 The purpose of this Clause is, in a sense, to serve notice upon local authorities that, if economic circumstances alter, the Government, over this long period of years, do reserve the right to seek Parliament's approval to reduce their aid accordingly.
There is one other point I would make about this, namely, that hon. Members really should not read too much into this.
§ Mr. Maclay
I have no feeling of guilt about this. I was merely realising that hon. Members may not fully appreciate the reasons for this Clause. [HON. MEMBERS: "Oh."] I will give them now.
It is clearly not sensible to freeze payment of subsidy over so long a period as sixty years; for we have seen how radically circumstances can change over a period very much shorter than this. What we are doing—and this is an extremely sensible and wise thing to do—is to leave the way open for any redeployment of subsidies which may be required at some time in the future in order to secure the best distribution of our resources.
§ Mr. Woodburn
The right hon. Gentleman has been very good in going over the different categories for which subsidies will be paid. He has mentioned the centres of towns. Now his Department has a list of buildings which are not allowed to be destroyed because of their historical interest. It applies to a great number of places. The City of Edinburgh, for instance—to take perhaps the principal example—is trying to reconstruct High Street to retain its character. Is the right hon. Gentleman still retaining powers to give special consideration where, in accordance with his wishes and the wishes of the Historic Buildings Council, these historical buildings are to be reconstructed in a special way?
§ Mr. Maclay
That is a slightly complicated point. I think that I had better not answer categorically at this stage since I might give a rather misleading 1368 answer. But I think that the point is covered, though the right hon. Gentleman has put it in a way I had not altogether expected.
§ Mr. A. C. Manuel (Central Ayrshire)
I should like to get this clear. The right hon. Gentleman is claiming the right, in case of circumstances altering, to take this power by Order in Council to reduce the appropriate subsidy during the period of sixty years, but not earlier than ten years. Is he fully realising that a high rate of interest of 7 per cent. to which local authorities' finances have to be geared in the provision of houses does make it very difficult for progressive, forward-looking treasurers to map out ahead as they would like to do to create the towns they want? Does the right hon. Gentleman realise that they find it very difficult because of their fear that he will reduce subsidy at some time in the future?
§ Mr. Maclay
I do not think that that worry should necessarily arise or need arise, because it is quite clear that the change in circumstances would have to be very substantial indeed before this provision could possibly be operated. It would be very obvious that the whole situation in the country had changed substantially. I do not really think that any treasurers need be inhibited by anxiety about what might happen under this Clause. This Clause is a sensible precaution, to serve warning now. It is better than waiting till, say, twenty years' time—though I doubt whether I shall be the Secretary of State then. It is better to give the warning now.
I have seen it suggested, and hon. Members opposite will no doubt repeat it, that this new power introduces an element of uncertainty into local authorities' plans for the future—the point which the hon. Member for Central Ayrshire (Mr. Manuel) has already made. I really cannot accept that. As I have said, this is only to serve notice, and this power would be used only if there were any major change in economic circumstances. But in such circumstances the whole basis of housing finance would probably be altered anyway; and the possibility of a reduction at some time between ten and sixty years from now should not, I repeat, worry local authorities any 1369 more than all the other uncertainties which may arise so far ahead.
I come now to another new feature in the Bill to which we do attach particular importance, the provision in Clause 11 which enables me to advance money from the Exchequer up to a total of £3 million to housing associations which undertake to build houses for letting at unsubsidised rents. This is one of the means by which we hope to fill the gap between subsidised local authority houses at one end and unsubsidised owner-occupied houses at the other. For this purpose the Secretary of State will be ready to enter into direct arrangements with housing associations which submit suitable proposals. Where a scheme is approved the advance may cover anything up to 100 per cent. of the cost, though I should expect that the associations would normally be able to put in some money of their own. The advances will be made at the same rate of interest as loans to local authorities by the Public Works Loan Board.
This is an experiment. It is a bit of pump priming really. I very much hope that it will prove a success, and encourage private builders to re-enter the field of building for letting. Housing associations have been selected for this experiment because, in a sense, they stand midway between the local authorities and the private builders and they already have considerable experience in the provision of houses to let. Only housing associations registered under the Industrial and Provident Societies Act will qualify for participation in this scheme, so as to make certain that only bona fide, non-profit-making organisations take part in it. We shall also want to make sure that the houses provided under the scheme meet a real local need and are built to a satisfactory standard.
We have great hopes that this scheme will encourage bold experiments in house building and house ownership, and it is because of this hope that I have taken discretion to waive the requirement that houses provided under this scheme should be kept available for letting. This will allow me to approve houses provided by a housing association on a co-operative basis.
Under this kind of arrangement the association would finance the building of houses for its members who would 1370 occupy the houses as individuals and, as members of the association, would jointly own them. This type of cooperative ownership is already an established and highly successful feature of housing in Scandinavian countries where it has made it possible to build and maintain housing schemes to extremely high standards of design, layout and amenity, and this is one of the cases which we in this country could do well to look at and try to improve upon.
§ Dr. J. Dickson Mabon (Greenock)
Is the right hon. Gentleman confident that the amount of money set aside centrally will be adequate to meet this purpose?
§ Mr. Maclay
Yes, at the start. One can only say that at this stage. One can only take a figure and start with it.
Houses under this scheme will not attract subsidy. An exception, however, will be made, as I indicated earlier, in the case of houses built for old people. Such houses will attract the £32 subsidy payable to housing associations under Clause 2 (2, c). This is further evidence that we want to do everything possible to encourage the provision of modern, specially designed houses for old people. We must remember that is estimated that in the next twenty years there will be an increase of 170,000 in the number of persons of pensionable age in Scotland and we must try to provide the right kind of houses for them.
The third main consideration to which I referred at the beginning of my speech was the level of rents in Scotland. I have already said something of the bad effects this has had on housing in Scotland and on the Scottish economy generally. Whatever one does about it is unlikely to be universally popular, but it is something which really must be put right and I am quite sure that many hon. Members would agree that many tenants are themselves uneasy about being heavily subsidised by their fellow citizens.
I have, therefore, thought very carefully about the best way of tackling this problem. There are, of course, many different approaches which might be tried. The Gordian knot could be quickly cut, for example, by taking the power to fix rents right out of local authority hands, but this kind of solution does not seem to me to be at all sound.
1371 I said in debate on the Estimates, on 4th July, 1961:I am certain that in the end good sense will prevail, and do not think that any hon. Member would wish to argue that the general responsibility for fixing rents should be taken out of the hands of the authorities."—[OFFICIAL REPORT, Scottish Grand Committee, 4th July, 1961; c. 17.]Starting from this point, therefore, we have considered a variety of other possible ways of limiting or guiding the wide discretion entrusted to local authorities in the fixing of rents.
One possible way would have been to provide in statute that the rate fund contribution to the housing revenue account should not exceed a given level. The difficulty about this is that if the statutory limit were to be high enough to be fair to some authorities, it would be too high for others. This might be avoided by allowing the Secretary of State to grant dispensations in certain cases. But this too would represent, as even I admit, an unacceptable interference with the independence of local authorities. I use the word "even" to meet the complaints of hon. Members opposite. If, however, they study the Bill and all other Bills with which I have been connected they will find that they are permeated with my confidence in local authorities.
Another plan might seem to be the provision of more detailed statutory guidance for local authorities on the factors they have to take into account when fixing rents. But authorities are already required to charge rents that are reasonable, and after careful study we came to the conclusion that any formal elaboration of this requirement could not be relied upon to achieve its purpose. This does not mean that local authorities are left without any guidance at all; for they have before them the excellent reports by two eminent members of the Scottish Bar on the rent inquiries in Glasgow and Dunbarton which discuss in some detail the factors which they should take into account in fixing rents.
The publication of these reports, and the action which I have taken to bring them to the notice of local authorities, have undoubtedly contributed to the encouraging movement in rents which has been taking place this year. During 1372 the last few months over 100 local authorities have either increased rents or intimated a definite decision to review them. This is only a beginning—for we have still a long way to go before we can be satisfied that Scottish local authority rents generally are on a fair and reasonable basis—but it is a useful beginning.
I hope, therefore, that the rent return which authorities will be sending in at the end of this month, and still more the return for next year, will show a result which will begin to look realistic and, I hope, well above last year's low average of 9s. 1d. a week. I am confident that the good sense of Scottish local authorities is prevailing, and will prevail, and that they can be relied upon to put their house in order without any further statutory directions.
It still remains true, however, that some local authorities may disregard their statutory duties in this matter. At present, the default procedure against such local authorities is cumbrous and perhaps not wholly effective. Clause 29, therefore, tightens up the default procedure which exceptionally may have to be carried through against a recalcitrant authority. The effect of the Clause is that where, after the procedure provided in Section 356 of the Local Government (Scotland) Act, 1947, has been followed, a local authority is found to be in default in its rent-fixing obligations, the Secretary of State may make a "rents scheme" which will be binding on the authority.
I must emphasise, however, that this applies only in the case of authorities who have been shown by a local inquiry to have been in default of their statutory duties. Not unnaturally, no one will he more pleased than myself if the exercise of the powers in Clause 29 is proved by events to be unnecessary.
The Bill also includes provisions on other matters—improvements, the functions of the Scottish Special Housing Association, slum clearance procedure, repairing obligations on short leases, and some miscellaneous provisions. I mention them only briefly at this stage.
Clauses 14 to 17 deal with improvements. The most important of these is Clause 15. Among other things, this enables the owner of a house improved 1373 with the aid of grant to increase the rent by 12½ per cent, of his share of the cost of improvement, instead of 8 per cent. as formerly, and it allows the local authority, where a house is not subject to a controlled tenancy, to permit an increase of more than 12½ per cent. It requires the authority in fixing the maximum rent for certain improved houses to have regard to the rents of similar houses not subject to a controlled tenancy. Clause 16 permits an increase from 8 per cent. to 12½ per cent. in the return available to the owner in respect of the cost of imp:7ovements carried out without grant.
Clauses 18 to 20 and Clause 33 extend the powers and functions of the Scottish Special Housing Association to enable it to carry out works of improvement and conversion, to participate in the scheme of building for letting at economic rents, which I have already described, and to take over the houses belonging to the First and. Second Scottish National Housing Companies. These two small companies, one established during the First World War, the other in the 1920s, no longer build houses, and it seems an obviously sensible arrangement that the S.S.H.A. should take over and manage their houses. The normal operations of the S.S.H.A., including assisting in overspill, will, of course, continue.
Part III of the Bill contains some useful amendments to the procedure for dealing with unfit houses. I said earlier that slum clearance and redevelopment is one of the biggest tasks before us. Most of our legislation about it dates back to 1925 and 1930 and it therefore seems desirable to see what might be done to improve the machinery under which local authorities carry out this work. I arranged for a group of my officials and representatives of the three local authority associations to review the existing procedures and consider what might be done to improve them. Clauses 21 to 24, together with some consequential and minor amendments in the Fourth Schedule, are based on the recommendations made by that informal group. The amendments have also been agreed in principle by the local authority associations, and I hope that they will be generally welcomed.
I do not suggest that the amendments set out in the Bill comprise all that might 1374 be done to revise the existing provisions, but I was anxious to take this opportunity to make a number of changes which seemed to offer practical assistance to local authorities with their immediate problems. The, amendments are technical in character, and I do not think that the House would want me to go into details of them now.
Part IV contains provisions designed to protect tenants under leases of under seven years against unreasonable repairing obligations. Under Clauses 25 and 26, the landlord is made liable for the repair of the structure and exterior of the premises and certain main installations, and any repairs provision in a lease purporting to impose liabilities on the tenant is rendered inoperative so far as it relates to matters for which the landlord is so liable. Clause 27 provides that the sheriff may authorise an agreed modification of these liabilities in an appropriate case.
The liability imposed upon a landlord by these Clauses is one which a good landlord would normally accept as his own responsibility, since the tenant under a short lease of, say, less than seven years does not have sufficient security of tenure to enable him to reap the benefit of any expenditure he might incur on major repairs.
These, then, are the proposals which I place before the House for consideration and discussion. If I were asked to describe the aim of the Bill in a word, I should say that its purpose is to introduce a much needed measure of flexibility to Scottish housing—flexibility in that Exchequer assistance will now be channelled into those areas which most need to tackle the special housing tasks; flexibility in that encouragement is given for building by agencies other than local authorities, especially for economic letting; and the flexibility which will result from more reasonable rent policies. I commend the Bill to the House in the belief that it will make a real contribution to the solution of the remaining housing problems in Scotland.
§ Mr. J. Grimond (Orkney and Shetland)
Does the right hon. Gentleman intend to say anything about the remote areas before he concludes?
§ Mr. Maclay
I did not intend to go into detail at this stage. I feel that I 1375 have kept the House for a long time. Doubtless my hon. Friend can deal with such matters when he speaks later.
§ 4.23 p.m.
§ Mr. Thomas Fraser (Hamilton)
I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:this House declines to give a Second Reading to a Bill which fails to deal with the problem of interest rates or to provide the local authorities and other public agencies with the means greatly to increase the supply of houses in Scotland; gives excessive discretionary power to the Secretary of State; and exposes the local authorities to financial uncertainty.The Secretary of State began his speech, as he ended it, by saying that we all ought to be satisfied with the present rate of house building in Scotland.
§ Mr. Fraser
The right hon. Gentleman began by saying that after the war the need was to build as many houses as quickly as possible, and sometimes indiscriminately, and he followed that—it was his next sentence—by saying that the need for the rush has ended. But he ended his speech by telling us about the present need to adjust rent policies, and so on. If he had brought forward any evidence that the local authorities in Scotland which have pursued a high rent policy in recent years had thereby been enabled greatly to increase the supply of houses, we might have been impressed by the contribution which increased rents might make to the solution of our housing problem.
The right hon. Gentleman and his hon. Friends and their friends in the country constantly say that the one obstacle to the provision of housing is the unwillingness of some local authorities to charge reasonable rents. Are there not some authorities in Scotland charging reasonable rents? Does not Edinburgh charge what the right hon. Gentleman would regard as reasonable rents? What is Edinburgh's performance compared with that of the general run of local authorities? Does not Dumfriesshire charge reasonable rents? What is its performance in the provision of houses compared with the performances of local authorities generally? 1376 The truth is that the Bill is introduced for one purpose, and one purpose only, and that is so to push up local authority rents that it will be easier for private enterprise to get still higher rents for the houses which it owns—not the new houses which it is to build, because it is not going to build new houses, but for the old houses which it still owns.
I shall try to put before the Secretary of State a few arguments in support of the contentions set out in our Amendment. I would, first, ask him to join me in examining our housing need. He has told us about the houses provided since the end of the war. He said there have been half a million; the White Paper says 450,000. The White Paper also tells us that about 800,000 houses, have been built since 1919. That is about half our stock of houses in Scotland.
When the right hon. Gentleman refers to 1919, he might equally well refer to 1913. During the last fifty years we have built half the stock of houses occupied by the people of Scotland at present. Does the Secretary of State know any other industrial country in which 50 per cent. of the population live in houses built before 1913? Such figures are thrown about recklessly and casually and are readily accepted by many people in Scotland who are of no particular political affiliation, and this causes them to adopt a complacent attitude and think that a lot of houses have been built and there is nothing to worry about.
The fact is that about one-third of our houses in Scotland—just over 500,000—are more than eighty years old, having been built before 1880. The Secretary of State knows full well that precious few of them contain any modern amenities. We are building at the rate of about 28,000 a year, from all sources. How long will it take to replace the houses built before 1880? At the present rate of building, it would take us eighteen years if every house built was set aside to replace one of those aged dwellings.
But a great many of our houses built after 1880 and before 1913 are also hopelessly inadequate to the needs of our times. A good deal of the slum clearance programme carried out in the last few years has been among houses built around the turn of the century. In 1377 industrial counties like Lanarkshire great numbers of houses were built for industrial workers, around the iron works and the coal mines, sixty or seventy years ago, certainly after 1880.
These houses were being described in this House thirty years ago as slums that ought to be removed. Many of them have been removed, but many still remain and ought to be removed as soon as possible. To us on this side of the House, it is not only a problem of dealing with these half million houses built before 1880. We have very many more families than we had. People are marrying younger, and they have to be accommodated. We also have a great housing need among the homeless families and those living in subtenancies.
I believe that anyone looking at these figures objectively, and knowing what these old houses in Scotland are like, will realise that, at a building rate of 28,000 houses a year, we shall never solve our housing problem. Indeed, as living standards rise in other parts of the world, our problem will be seen to be getting worse and worse. This is the condemnation of the Bill. It does not begin to deal with the problem of housing. It reeks of complacency, as did the right hon. Gentleman's speech. The Secretary of State and the Under-Secretary of State seem to think this extremely funny.
§ The Under-Secretary of State for Scotland (Mr. T. G. D. Galbraith) indicated dissent.
§ Mr. Fraser
I wonder whether any of their hon. Friends are satisfied with this rate of building.
In a speech last week I mentioned some conditions of housing in Glasgow. I have no doubt that Members opposite thought that I had greatly exaggerated. The following day, many Scottish national newspapers sent their reporters and photographers to look at these buildings, and they discovered that I had not exaggerated. Indeed, they found that I had greatly understated the seriousness of the position.
I wonder whether the right hon. Gentleman now knows of the conditions in which so many of our fellow citizens live. I have brought along some Press reports, but I do not think that I should 1378 trouble the House by reading them. I can say, however, that the owner of these houses, let at rents of from £2 8s. to £2 13s. per room per week—houses built before 1880, with no modern amenities—said, following my speech, that any tenant who gave an interview to the Press, or allowed photographers in, would immediately get one month's notice to quit.
I talked about a family of a husband and wife with two children and one expected, living in a room 9 ft. by 9 ft. If the right hon. Gentleman has read his newspapers during the last few days, he will have read about some families much bigger than that in rooms of the same size. I could give the name and address, quoted in a newspaper which I have here, of a man who said:I live with my wife and five children in one room. It's only 9 ft. by 9 ft.… We pay £2 8s. for it.How do these people manage to live in a room 9 ft. square? What is the right hon. Gentleman proposing to do, by the Bill, to alleviate the problems of these people? Nothing at all. All he is doing is to make it easier for the owners of these one-room houses to increase rents still further.
The Secretary of State makes it clear that he wants to encourage private enterprise. I see that the Under-Secretary of State is nodding vigorously. The right hon. Gentleman and his right hon. and hon. Friends have been responsible for housing in Scotland for the last ten years, but the only kind of private enterprise they have encouraged so far is the enterprise of Mr. Andrew Fulton and his like, who have exploited poor people in Bridgeton and Camlachie and other parts of Glasgow, and Mr. McClughan, in Dunbartonshire. That is the kind of enterprise encouraged by the right hon. Gentleman and his predecessors in their housing policies. It may not be the kind of private enterprise that he wants, but the proof of the pudding is in the eating, and it is the only kind of private enterprise in housing that he is getting.
Sir Godfrey Collins, who was Secretary of State for Scotland thirty years ago, speaking on the Second Reading of the Housing (Financial Provisions) (Scotland) Act, 1933, said:Human ingenuity and human skill, with goodwill on both sides, could solve this problem and banish slums and over-crowding from 1379 our midst … Money is plentiful at low rates of interest."—[OFFICIAL REPORT, 9th February. 1933; Vol. 274, c. 495.]The interest rate was then 3½ per cent. Sir Godfrey recognised that the interest rate had something to do with the cost of housing, but the present incumbent dismisses them as though they do not matter.
Does the right hon. Gentleman consider that the rate of interest for investment is of any consequence? if he wants to borrow money, is he unconcerned with the interest rate? He has been telling us about the Toothill Committee, which seems to attach importance to the interest rate paid on money required for capital investment for industrial development. Importance to the interest rate must also be attached by those who are concerned with the provision of housing, whether by private enterprise or public enterprise.
The problem which Sir Godfrey Collins thought was to be solved under the Act of 1933 is still with us, and what must cause us a measure of shame is that many of the slums which Sir Godfrey wanted then to remove are still with us.
§ Mr. William Baxter (West Stirlingshire)
In case there is any misunderstanding, we should make it abundantly clear that the 1933 Act was not very effective. I believe that under its provisions a house never was built.
§ Mr. Fraser
The Opposition of those days put down a reasoned Amendment and voted against the Bill because its purpose was to reduce subsidies provided under previous Acts of the Labour Governments, But Sir Godfrey Collins was quite certain that, because the interest rate had gone down to 3½ per cent., the local authorities would have no difficulty in solving the problem of slum living and overcrowding.
I spoke two weeks ago of the comparative performances of other countries. The right hen. Gentleman seemed to think that no useful purpose was served by comparing Scotland's performance with those of other countries. I do not know why he takes this view. Well, perhaps I do know; it is because he comes so badly out of the comparison. Each year, Norway and the Nether-lands build about 7.5 houses per 1,000 1380 of the population, Sweden 9, and West Germany 10, but the Secretary of State is satisfied with five per 1,000 for Scotland. Every hon. Member opposite is satisfied with the provision of five houses per year per 1,000 of the population. I et them calculate how long it would take to rehouse all the people, even if the population never increased, at that rate.
Scotland's performance in the provision of houses represents social stagnation, if not actual decay. The Secretary of State must know that, if he has ever taken time to sit down and consider the magnitude of the problem. He is bound to realise that his performance, the performance of all of us in Scotland, in the provision of new houses represents social stagnation. Every country building fewer than five houses per 1,000 of the population is seen to be suffering social and economic decay.
The right hon. Gentleman will not deny that. He has only to read the report on housing trends from the Economic Commission for Europe to see the truth of what I have just said. Every country in Europe which is expanding socially and economically has a far better housing performance than we have, and those countries whose performance is worse are countries with which we do not like to be compared.
§ Mr. Maclay
Once again, the hon. Member is making a thoroughly emotional speech which is not properly related to the facts of housing as they can be seen in Scotland. He is being selective in his figures, as one is bound to be with figures. Has he carefully studied the building record of some of the countries he has mentioned between the end of the war and 1954 or 1955? One can go on with statistics for ever, but the hon. Member ought not categorically to make statements completely ignoring the housing scene which he can see as he moves around Scotland.
§ Mr. Fraser
I thought that every hon. Member would have appreciated that I was not relying upon emotion, but was using statistics to bolster my argument. The Secretary of State has been annoyed not by my emotion, but by my statistics. Of course, I have watched the performance of other countries since 1945. In 1951, when I was an Under-Secretary at the Scottish Office, I visited Europe. The reason for my visit was that in the early 1381 summer of 1951 there was one country in Europe which had just overtaken the United Kingdom in the provision of new houses. Housing provision in the United Kingdom under a Labour Government was better than that in any other country in western Europe.
§ Mr. Maclay rose—
§ Mr. Fraser
That is true. Is the right hon. Gentleman rising to say that what I have just said is untrue?
§ Mr. Maclay
The hon. Member wanted a debate and I will debate with him for a short time before leaving him to get on with his speech. He does not appear to appreciate that he is making my point. Certain European countries were extremely slow about getting under way with their building programmes after the war, for perfectly understandable reasons. Nevertheless, the fact is that they were very slow in starting.
§ Mr. Fraser
Unlike the Secretary of State, I am not interested in making cheap debating points. Over and over again he has asked the House to compare the number of houses the Government are now building with the "miserable" record of the post-war Labour Government. Now he says that the reason we do not have to build as many houses as European countries is that they did not build as many as we did when we had a Labour Government. I wish that he would make up his mind about which leg of the argument he will stand on.
It is true that by about 1951 some countries in Western Europe began to catch up with the United Kingdom, and that, today, some of them are building twice as many houses as we are. That is my point. If one studied the housing needs of those other European countries, one would find that they do not have one-third of their population living in houses built before 1880. The right hon. Gentleman will find that they do not have only one half of the population living in houses built in the last fifty years.
On the Continent, they are not satisfied to adopt a housing policy which enables private interests in housing to continue to draw rents ad infinitum, regarding housing, as the Marley Committee said about thirty years ago, as a dripping roast which would go on dripping for ever. They try to provide that 1382 houses are replaced when their useful life comes to an end. The Secretary of State seems to think that there is no need for that kind of approach to Scotland's housing problems.
When the 1957 legislation was introduced, the then Under-Secretary, now Lord Craigton, the Minister of State, said:The interest rate is now 5½ per cent. and it might be assumed that the average over the next few years will be lower—perhaps 5 pet cent … There is absolutely no reason to assume that because they are high now they will remain as high as that for any long period."—[OFFICIAL REPORT, Scottish Standing Committee, 2nd April, 1957; c. 284.]That was in the spring of 1957 and by September interest rates had risen to more than 6 per cent. and have never been less than 6 per cent. Even four years ago, Scottish Ministers thought that interest rates were of some significance, but the Secretary of State seems to think that they do not matter.
Paragraph 17 of the White Paper says:The housing problems of Scotland, however, cannot be satisfactorily tackled until housing finance is put on a realistic basis …I agree with that proposition, but I would have thought that housing finance would include the cost of the houses and the cost of the money borrowed to finance them. That is why we want interest rates lowered and housing finance put on a realistic basis. The Secretary of State ought not to have to be told this.
Neither public nor private enterprise can meet our needs for houses when money costs 6¾ or 7 per cent., or, in the case of those buying their own homes, 8 per cent. We cannot solve our problem on the basis of interest rates of that nature. I challenge the Secretary of State to name one other country which even tries. No other country seeks to provide housing accommodation for letting by public authorities, or by private enterprise, or for owner-occupation at interest rates at that level. Other countries know that it is crazy even to try.
The Tory Government have been in office for ten years, taking over at a time when the Bank Rate was 2½ per cent. and the rate charged by the Public Works Loan Board for housing and other purposes was 3 per cent. From time to time they have got the country 1383 into an economic mess. They have got the balance of payments into a mess. The gold and dollar reserves have been run down and interest rates have had to be pushed up to 7 per cent. to attract hot money from overseas, hot money which comes in short term.
The right hon. Gentleman seems to think that private and public enterprise will borrow money for this long-term purpose of providing houses at these interest rates which are justifiable only as a short-term remedy for a short-term problem. He will not get the houses built. After all, a house which costs £2,000 to build costs over £7,000 over sixty years. This is not because of the cost of materials and labour, or because of wage rates. It is because the moneylenders have to get a bigger cut.
The right hon. Gentleman wants to get some assistance from the non-profit-making housing associations. He thinks that they might be able to let houses at non-subsidised rents. Does he know that if the interest rate stays at 7 per cent. or 8 per cent., or, in the case of the Public Works Loan Board at 6¾ per cent., the non-profit-making housing associations will have to charge a rent of not less than £4 a week? Does he know that in addition the tenants have to pay the rates on the houses, and, as these could not be less than £2 a week, it will mean an outlay of £6 a week?
Does the right hon. Gentleman know that the young married man trying to buy a house at the moment has to pay nearly £3,000 for the most modest bungalows built by speculative builders? Does he know that such people have to pay at least £6 a week, or £300 a year, for the accommodation they occupy? Many have to pay a good deal more, usually £350 a year, but this figure, of course, includes the rates.
Does he realise that the young man who has graduated from university and has married at a fairly early age, as people do these days, and got a job at, say, £750 a year—which means that he has not become a school teacher—will not get a mortgage? The right hon. Gentleman thinks that this is the type of person who ought not to be dependent on the local authority. Such a young man cannot possibly qualify for a local authority house for some years 1384 to come. His name just goes on the housing list. Does the right hon. Gentleman expect this young man to provide a house for himself by borrowing money at 7 per cent. or 8 per cent.? The right hon. Gentleman knows full well that, first, the building society will not advance the money, and, secondly, it will take more than half this young man's salary to finance the loan if he gets it, and to pay his rates.
Local authorities, public agencies, or private enterprise will not provide houses either for letting or for owner occupation as long as the interest rate remains at 6, 7, or 8 per cent. The Secretary of State talks about these nonprofit-making housing associations, but I have quoted the rents they have to charge. I have stated an aproximate figure. I hope that he will not say that I have exaggerated. How many tenants of our half-million old dwellings can afford to pay £6 a week for a house? How many of our homeless families living in sub-tenancies can afford to pay that sum? The right hon. Gentleman will have to look far and long to find one person who can take the accommodation which he is so hopeful of being provided under the provisions of this Bill.
The right hon. Gentleman explained his new subsidy plan. I turn to paragraph 25 of the White Paper to get an explanation of it. It says:The test of financial need will be based upon a comparison between the local authority's expenditure on housing, as brought out by the housing revenue account, and the resources available to them for meeting this expenditure.All very nice, but the Secretary of State for Scotland arrogates to himself the determination of the resources available to a local authority. He decides what the resources are. The expenditure can be ascertained. This is not a notional figure. It is an actual figure which has to be met.
According to the Rates Review published in December last year, in 1959–60 the average expenditure per house was just over £70 a year. The average expenditure now will clearly be much more—£72 or £73 per year and for some local authorities it will be £80 or more. But each new house provided by a local authority will involve an expenditure of twice the average expenditure on existing local authority houses. Indeed, I 1385 doubt very much whether any house built before 1952 involves an average expenditure of £72 or £73 per house.
In short, this new formula has been worked out by the Secretary of State fur Scotland for the purpose of transferring the burden of dear money to the tenants of council houses and for no other purpose. That is the whole object of the exercise. Incidentally, I wonder whether the Under-Secretary of State for Scotland will tell us when we can expect a new Agriculture (Scotland) Bill? I shall be interested to see the formula by which the Secretary of State for Scotland will calculate the notional income of the individual farmer and put it against the actual expenditure before he determines whether the farmer will get the higher or the lower subsidy. There are a number of hon. Gentlemen opposite who will no doubt be most willing for an attempt to be made to measure their ability to meet their expenditure before they get any subsidies from the Exchequer.
It may be that it will be necessary to have a notional figure for the individual farmer, just as we have a notional figure for the local authority, but we will not be able to measure this figure against the gross annual value of the land which he occupies because, under the Valuation and Rating (Scotland) Act, 1956, the land has no gross annual value. It is not entered in the valuation roll at all. But, when the local authority wants to buy some of the land to build houses, or even when private enterprise wants some of it for the same purpose, and the individual would-be owner-occupier seeks to occupy a little plot of the land, it has value all right. Perhaps we should take these things into account when determining the subsidies to farmers in future.
In seeking to find out how fair this formula was, I consulted a few local authorities. That seemed a reasonable thing to do, and I hope that the Secretary of State for Scotland will not think that it was unfair of me to do that. For example, I consulted the records of the Burgh of Hamilton and I discovered that between 1919 and 1939 it had the best housing record of all housing authorities in Scotland. What will its reward be for doing so well in the provision of houses? For its enterprise in those years between the two wars it will receive a subsidy of 1386 £12 per house for as long as the Bill remains on the Statute Book—unless the Secretary of State, at some time reduces or even abolishes the subsidy, by virtue of his powers under the Bill. He has no powers to increase the subsidy. The local authority cannot look for that. It will never receive a higher rate of subsidy—for no other reason than that it built far more houses in the inter-war years than it has built in the years since the war.
The local authority has been told that if it can build houses very quickly in the next three or four years it could qualify for the higher subsidy, but by that time the Secretary of State will no doubt have used his powers to adjust the figure of £60, and will have made it £70, so that it will be in no better position.
How does the Secretary of State know that Hamilton does not have a need equal to that of other large burghs in Lanarkshire, or other parts of Scotland? Does he know what its need is for houses for people who have no separate homes? Does he know the number of unfit houses in the burgh? Has he any idea of an average income of a Hamilton family, or of the level of employment in the burgh? All these questions will have to be taken into account if we are to assess the measure of the need of any local authority for more houses.
In cases where private enterprise was making a contribution within an area of a local authority the Secretary of State says, "We will take a notional figure." He thinks of a number, and the number is 60. Why is the number 60? He has omitted to tell us, although it seemed to me that in the course of his speech he was criticising the Scottish assessors for having arrived at a figure of about £46 as the gross annual value. He seemed to think that if it had not been for the long history of low rents in Scotland the gross annual value would have been determined by the assessors at about £60. That was the inference to be drawn from that part of his speech.
Since he has had to deal with a lesser figure of £46 or thereabouts, the right hon. Gentleman provides, in a complicated way, for arriving at a figure in respect of the gross annual value which is half way between £46 and £60. This is taken as the notional income from 1387 local sources, to which he adds the Treasury subsidy, which gives him the full income. If that figure exceeds the rate of expenditure per house the lower rate of subsidy is paid, and if it does not the higher rate is paid.
But the Secretary of State proposes to take powers to adjust this figure, by Order. When does he think that it will be necessary to increase it to £65 or £70? Why does he think he should increase it? I suspect that it is simply so that he can pay about the same amount in subsidies as he is paying to local authorities at present, with some getting more and some getting less. If a local authority which is receiving the lower rate of subsidy builds houses costing £140 or £150 a year it will add to its expenditure and will begin to qualify for the higher rate of subsidy, and then the Treasury subsidy expenditure will increase. At that point, will the Secretary of State bring in an Order to increase the figure of £60? We are entitled to be told.
The Minister is taking power to adjust the figure, or even to reduce or abolish subsidies retrospectively after ten years, and I would have thought that any Government with any respect for parliamentary democracy would have taken the view that any such alteration merited the kind of consideration that we are giving the Bill today, and would have incorporated the necessary provision in a Bill to be brought before Parliament, and would not merely have brought forward an Order which is subject to an affirmative Resolution, with the Whips on and with hon. Members opposite being invited to sit in the Smoking Room until the Division bells ring. We have no right to give any Government or Secretary of State for Scotland—and least of all this Secretary of State—the excessive powers being sought in the Bill, or to place local authorities in such financial uncertainty.
In the past, local authorities have entered into a partnership with the Government in the building of houses. For many years they have borrowed money from the Public Works Loans Board at the current rate of interest, and they have to pay that rate of interest for the whole period of sixty years. If the rate goes down at any time they do not receive the 1388 benefit of the reduction. By the same token, they receive the subsidy for the whole sixty years. But the whole business of partnership is being ended by the Bill. Local authorities are now being told—and some of them may have been taken in by this—"Here is an adjustment of the subsidy provision. Instead of the existing £24 subsidy for sixty years you will get a £32 subsidy until the Secretary of State, in consultation with the Treasury, thinks that you are getting too much." The subsidy will then be adjusted by adjusting the £60—and it will be either reduced or, perhaps, abolished retrospectively after ten years.
Over the next ten years local authorities will be building houses in respect of which they are receiving a subsidy, and, normally, they would assume that subsidy to continue for the whole life of the loan, namely, sixty years. But the Secretary of State is now telling them that there is a possibility that a future Secretary of State will exercise the powers provided in the Bill, and, at the expiry of ten years, will abolish all subsidies retrospectively, right back to 1st November of this year—the date on which houses are approved for subsidy under the provisions of the Bill. And the right hon. Gentleman wonders what the reasoned Amendment means when it talks of local authorities being placed in uncertainty! If he does not understand what it means by now he should resign as quickly as ever as he can see the Prime Minister.
When the Secretary of State was dealing with the detailed provisions of the Bill he referred to Clause 4, under which he proposes to make money available for non-profit-making associations. If they can give us more houses, hon. Members on this side of the House will be delighted. I have seen the work of some co-operative housing associations in other countries. They are doing an excellent job, but I repeat what I said a short time ago; I have not seen any co-operative housing association trying to build houses with money borrowed at a rate of interest of 7 per cent. I cannot see any of them in Scotland trying to do it either; or, at least, if they do, they will certainly not be providing houses for the working population.
1389 I say to the Secretary of State that Clause 16 goes much too far in giving to the owner of private property 50 per cent. of the improvement cost. I do not suppose that many such payments will be made, for the simple reason that many houses owned by private enterprise and subject to these terms are more than fifty years old. Many are more than one hundred years old and many of them are not capable of being improved at all. But assume that some may be capable of being improved. Bearing in mind that the houses are very old the improvement is likely to be rather costly. It may cost £400. If a bathroom and kitchen is to be installed and a food store and hot and cold water provided, that would be the minimum figure.
First, the landlord gets £200 from the State. Incidentally, there is no test of need. The landlord may be a millionaire, or a property company which has been paying dividends of 20 per cent., 30 per cent. or 40 per cent. for years. The landlord finds £200 out of his own resources and, as a result of investing this £200 on a house on which he and his predecessors have probably not spent anything for fifty or sixty years, he will be able to increase the rent by £25, or 10s. a week. That increase is not for a set period of years, but for as long as the house remains standing. This seems to us to be quite unnecessarily generous to the private landlord. But we are inclined to think that most of the houses owned by such people are in such a state of dilapidation and needing replacement that it is not likely much can be done under this Clause.
I turn to the default powers of the Secretary of State in Clause 29. The right hon. Gentleman said that my hon. Friend the Member for Kilmarnock (Mr. Ross) might quote some remarks which the right hon. Gentleman made some years ago. I do not want the Secretary of State to be too disappointed and so I will quote to him part of a speech he made fourteen years ago, on 17th December, 1947, in the Scottish Standing Committee. The right hon. Gentleman said:For the last two years we have seen, stage by stage, the centralisation of a number of things, particularly in regard to local government matters.… I have been extremely worried about it.1390 I can see the right hon. Gentleman's brow wrinkling as a result of his worrying that centralisation powers were being sought at that time by my right hon. Friend the Member for East Stirlingshire (Mr. Woodburn).
The Secretary of State went on:If the Secretary of State wanted to use his powers for political purposes he could do so".Then we got the story of Senator Huey Long, and the right hon. Gentleman continued:That may seem very far-fetched, but it shows what happens when powers are put completely in the hands of one man. We know that it would not happen with the present Secretary of State, but we shall have other Secretaries of State in the future."—[OFFICIAL REPORT, Scottish Standing Committee, 17th December. 1947; Vol. 1, c. 2304–5.]Those were prophetic words from the Secretary of State—we have got him. The power he is now claiming for himself under Clause 29 as he knows quite well runs counter to everything he has ever said about trusting the local authorities and about fostering local government. If the Secretary of State wishes to negative local democracy, this is the way to do it.
Already, the right hon. Gentleman must know that local authorities are saying, "Why should we bather to adjust rents? Why not leave it to Maclay?" That is what they are saying. That will not encourage responsibility for local affairs. This is the complete negation of local government and local democracy. Clearly, the Secretary of State wants to see rents which are fixed and determined by the county assessors. In 1956 the valuation for rating purposes was the actual rent. This was seen to be wrong, and so the assessors were told to get on with their job and to pay no attention to the rent in making their assessments. Now that they have determined figures which are at least 100 per cent. more than the rents paid, the Secretary of State says, "These men know what they are doing. The figure determined by them is the rent we ought to apply to local authority houses"
When the right hon. Gentleman exercises his powers under Clause 29 he will have no difficulty at all in working out a rent scheme for any little local authority in any part of Scotland. He will just say that the rents are as laid down by the 1391 county assessor in the gross annual value he has determined for the house. Am I right?
§ Mr. Maclay
I do not want to interrupt the hon. Member on that point, but I wish to make it absolutely clear, in case he has not understood the Bill, that I cannot function on this matter until a local authority has been declared to be in default.
§ Mr. Fraser
I know that perfectly well, but I thought that the existing provisions of the Statute had worked reasonably well. We have not had very many local authorities which have been declared in default over the years. So far as I am aware, there has been only one occasion on which the Secretary of State has been unable to accept the new rents proposed by a local authority after it had been said by the Commissioner to be in default. To make a complete break with the past and introduce this new arbitrary power for the Secretary of State in this Bill on a basis of one example over forty years of housing provision by local authorities is a bit thin and ought not to be done, in my opinion.
The Secretary of State is concerned about people paying more in accordance with their ability to pay. To listen to him, one would think that every tenant of a local authority house was an average industrial male worker earning £15 a week. This figure of £15 a week earnings does not apply in Scotland at all. But, in any case, local authority tenants are not all industrial male workers. A great many of them are non-industrial workers. A great many of them are sick and unemployed and the number includes industrial and war disabled and retired people. As can be seen from the Government's own statistics, 50 per cent. of the population in the United Kingdom as a whole is living on a wage of less than £10.
The Secretary of State and his hon. Friends tell us from time to time that rents are just over 9s. and, as they say, equal to the cost of two packets of cigarettes. That is not true. A person who buys two packets of cigarettes and pays 4s. 6d. for each of them is not only paying the price of the cigarettes. He is paying the duty as well. The price 1392 of a packet of cigarettes happens to be 10d. Three shillings and eight pence of the purchase price is duty. But the purchaser does not get one without the other. Similarly, in housing, he does not get a house for 9s. without paying the rates. The rent and rates for some people will be at least 25s. That is a hefty lump from a wage of £10 a week, bearing in mind that the same person is paying more than 10s. a week in National Insurance contributions. We ought not to talk gaily about increasing rents to this kind of person.
Having said that, I want to make it quite clear to the Secretary of State that I think that many of the local authorities have been too slow in adjusting their rents. I have said this before. There are some tenants in secure jobs, with incomes of £1,200 a year or more, who ought not to be in subsidised local authority housing at all. I can tell the Secretary of State that in my constituency I know people in this category, and they are all members of the local Tory Party. They are not on my general management committee, but in the Tory Party, and I wish they would get out of their subsidised local authority houses and make room for the people whose need is greater than theirs. I should like the Secretary of State to help them, albeit they are members of the local Tory Party, by enabling them to borrow money to make provision for homes for themselves at lower rates of interest than is the case at present.
Rents are not the real problem. With our housing conditions as they are, this Bill should have aimed at a building programme equal to those of our European neighbours. I do not ask for more than that. It would require a programme of between 45,000 and 50,000 houses a year in Scotland. Instead, we have a Bill the only purpose of which is to bolster private enterprise landlords to make their money out of houses built last century—houses which ought to be swept away as soon as we can rehouse the tenants.
§ 5.22 p.m.
The Earl of Dalkeith (Edinburgh, North)
I have listened with great interest to the speech of the hon. Member for Hamilton (Mr. T. Fraser), and I was slightly irritated to find that he anticipated some of the things which I 1393 intended to say myself. I welcome this Bill as far as it goes, though I will admit that I would have liked to see it go further in some respects. However, it takes several steps in the right direction.
Having the honour, as I have, to represent the constituency which combines some of the finest city architecture in the world with some of the most squalid slums in Britain, I feel that I can speak on housing in Scotland with some feeling. At the risk of exposing myself to the criticism of irresponsibility, I should like to say that I should like to see a vast expansion in our housing and house building programme in Scotland. However much we may boast of what we have done since the war, however we may compare the records of houses built under a Unionist Government—[HON. MEMBERS: "Tory Government."]—and a Labour Government, and however much we may rejoice in the fact that one in every three families in Scotland now lives in a post-war house, I am very far from satisfied with what has been achieved and, indeed, with the progress we are now making.
We have to look at this matter as a long-term problem, which must include also recognising the fact that Scotland's population will not only increase by natural means, but also by virtue of the fact that, with new industries coming to Scotland, a great proportion of our population in future will remain in Scotland, unlike the process in the last few years whereby they tended to drift south of the border. That means that we have an enormous task to cope with.
I am fully aware of the arguments to which we must naturally listen inasmuch as the Government have to strike a happy balance of priorities between what they spend from the available funds on housing as opposed to all other demands, for such things as schools, hospitals, roads and a hundred and one other demands. Nevertheless, I feel that housing should have a higher priority than it is enjoying at the present time. I also realise that everyone has his own pet subject on which he feels that the Government should spend more money, but we must recognise that in order to do so the Government can only spend more money at the expense of some other subject.
1394 Following, as this debate does, on a two days' debate on transport, I would rejoice in seeing some of the money saved on our railways being put towards housing. It may well be that we could find some way whereby some of the money at present expended on uneconomic coal mines could also be devoted to more deserving things, such as housing.
I should like to comment briefly on one or two of the proposals in the Bill, and the first question is that of the subsidies to the local authorities. I hope that in the deserving cases these subsidies will be sufficient. Nevertheless, they are a good deal more generous than what English boroughs are to receive, though I hope the Secretary of State will stick to the policy outlined in the White Paper for housing, where there is mention on the first page of flexibility. I hope that that can be taken to mean that the Bill will be flexible, not only in regard to the areas where help can be given, but also in reviewing the amount of the subsidy in a reasonable period of time, according to the progress that is being made.
In regard to advances for private building by non-profit-making associations, this is an excellent idea, which works well in other countries. The hon. Member for Hamilton wondered whether, with the present interest rates, much advantage will be taken of this. Undoubtedly, interest rates constitute a very serious problem, and I shall look forward to hearing the comments of my hon. Friend when he winds up this debate.
§ Mr. James H. Hoy (Edinburgh, Leith)
If the noble Lord says that interest rates have not very much to do with it, he does not understand the problem at all. Does he know what the interest rates are on houses? The Secretary of State gave the figures ten days ago, showing that the amount of interest per annum has gone up on a £1,500 house from £51 to £107. Does the noble Lord think that this has no influence on housing at all?
The Earl of Dalkeith
I think the hon. Gentleman must have misheard what I said. If he consults HANSARD tomorrow, he will find that he is taking up the wrong point.
1395 I wonder whether the sum of £3 million will be enough, should this scheme be satisfactory, and I would ask my right hon. Friend whether he would consider reviewing this amount at the end of a period of, say, one year, particularly in view of the fact that 1 understand that included in this £3 million there will also be the share-out to associations which have carried out the modernisation of old houses under the standard grant system. My anxiety about this figure of £3 million is this. Assuming that we can build houses for £2,000 each, this will mean that only another 1,500 houses will be provided for this money. I should like to see a very much higher figure.
I am also very glad to see something in Clause 7 with reference to the redevelopment of central areas. This is an extremely important point. With more cars on the road and with the difficulty of coming into and leaving large towns and cities, more and more people want to live in the centre of cities, and I am very glad to see that the Government have recognised this in Clause 7. There is not time to mention all the points with which I should have liked to deal, but I want to submit what I think are a few constructive suggestions.
In the first place, I wish to mention the question of the improvement of older houses. It seems to me that there is an unfortunate tendency nowadays to assume that because a house is old it is necessarily bad.
The Earl of Dalkeith
I do not think that the age necessarily makes all the difference. Very often old houses, even if built in the early nineteenth century, can be structurally sounder than houses built by local authorities between the wars.
§ Mr. Manuel
I am not talking about ancestral homes. They come into a different category. In the type of houses that I am used to there is usually no damp course, and to try to put a damp course into such houses is unbelievably difficult and really not worth while. It is often better to build a new house than to try to modernise an old house in the way the noble Lord indicates.
The Earl of Dalkeith
I entirely agree with the hon. Gentleman. Of course, in the case of some houses it is less economical to try to improve them than to build a new house. Nevertheless, there are many houses which are structurally sound and capable of improvement and which we should try to do more to improve.
There are several suggestions that I should like to make in this respect. We have, as we know, the standard grant which, alas, has only been taken advantage of in the case of some 4,000 houses during the last year. This is a trifling number compared with the number of houses built in Scotland before the 1914–18 War. I understand that there are some 800,000 such houses, which represent, approximately, half the houses in Scotland.
I wonder how many house owners realise what advantage they can take of these grants. Is it possible to give greater publicity to their availability? Might it not even be worth the while of my right hon. Friend buying time on Scottish Television in order to advertise the availability and advantage of these grants?
I also wish to suggest that perhaps special grants might be made available in the case of those houses which are too small for modernisation. There is an enormous number of houses in Scotland which can only be turned into decent homes by knocking two into one. Many owners are reluctant to do this because the cost of conversion is fairly high and because they do not think that it would pay them to do it, with one rent coming in at the end of the day instead of two. I think that the making of a special grant in these cases would ultimately increase the number of available decent houses.
Could we also consider removing some of the uncertainties which owners feel as far as the future of development areas is concerned? Some owners may ask whether it will be worth while improving properties if the street is going to be pulled down in the next ten or twenty years. I wonder if local authorities could do more by way of notifying the public about future development.
We should also try to avoid discouraging modernisation by introducing rent control after modernisation 1397 by Standard Grant for houses which are not at present rent controlled. I am sure that some owners may be discouraged from risking their money if they feel that they are not going to get an adequate return from it after modernisation because of control.
On the question of a special subsidy for buildings of architectural interest, in the City of Edinburgh there is a number of fine buildings of architectural interest and the local authority is faced with the difficulty of trying to preserve the buildings from the point of view of the amenities of the city as a whole. It is having to pay a great deal more in conversion costs than it would if it were pulling down the entire street and building more modern types of houses. I wonder whether in these special cases it would be possible for an Exchequer grant or a subsidy of some sort to be considered.
On the question of tackling the present rent control of houses, I wish to quote from a memorandum sent by the National Federation of Property Owners and factors in Scotland. It states:It is not difficult to appreciate that out of present controlled rents it is utterly impossible to carry out adequate maintenance at present day costs and that owners are powerless to avoid the progressive deterioration of their properties. A most serious aspect of the position from the national point of view is that the post war rent legislation in Scotland has achieved practically nothing in the way of arresting the premature run down of substantial and basically sound properties. It is hardly surprising that in Scotland practically no use whatever has been made of improvement grants or standard grants in respect of investment property since owners are understandably unwilling to invest additional capital in an investment which to date has proved even more disastrous than many Government Stocks ".The hon. Member for Hamilton made reference to a curious body of people whom I, personally, have never come across, who are, I understand, millionaires owning down-at-heel houses and who are, supposedly, going to reap enormous rewards and benefits by taking advantage of the grants available under the Bill for improving old houses. I do not believe that the difference between what owners of houses are to get now compared with what they have been getting will be very great. If what he said was the case, the number of houses improved would not have been 4,000 but 1398 40,000. I think it is a flight of fancy to suggest that there are many millionaires owning these down-at-heel houses. There are certainly many cases in Edinburgh where the owner of the house is often less well off than the occupant.
Could we perhaps consider a scheme to facilitate the exchange of houses? I think we all know of cases where old couples are living in houses which are bigger than they want and of cases where young couples with large families are squeezed into small homes. Would it be possible to introduce a scheme, in collaboration with the local authorities, to encourage such people to exchange houses? There is, of course, the question of the cost of removal, and this may prove at present to be a disincentive to making the exchange. Could my right hon. Friend consider giving some sort of Exchequer help to such people to enable them to move from one house to another?
My final point in relation to the building industry itself. First, in relation to the labour force. I have been told on many occasions in Edinburgh that one of the principal reasons for the delay in producing more houses is the shortage of building labour, particularly skilled labour. This position is, quite clearly, likely to become more difficult in the future.
More factories will be built as the Local Employment Act becomes more effective. This will create an extra demand on the building labour resources of the country. More shop owners are going in for modernisation as customers become more prosperous. Shops generally are doing a bigger turnover and their owners can better afford to pay the high charges for improvement than can local authorities for house building. There are many cases where builders are being taken away from house building to undertake other work, necessary though it may be.
What is more, with new factories and new industries, there is the possibility that a part of our present building force will be attracted away from the building industry into the factories, partly because, as we all know, the building industry is so dependent upon the weather. I wonder if the Government would look into the whole question of labour in the building industry and see 1399 specifically if it can help by introducing some form of Government-sponsored apprenticeship scheme.
§ Mr. William Hannan (Glasgow, Maryhill)
Will the noble Lord explain how introducing an apprenticeship scheme would enable the present labour force to build more houses?
The Earl of Dalkeith
I believe I introduced this part of my rather rambling speech by saying that this is a very long-term problem which we have to look at. I started by saying that throughout Scotland more factories are coming. We know the population is increasing and expect that more people will stay in the country. As I see it, we shall have a heavy house building programme for the next fifty years at least.
§ Mr. James Dempsey (Coatbridge and Airdrie)
Is the noble Lord aware that the only way to attract recruits to the building trade is to give them a guaranteed working week in the winter period? Does he realise that the Government will not help matters by suggesting the exclusion of Irish labour?
The Earl of Dalkeith
We can all look round the country and see extremely progressive building firms, of which many are operating in my constituency. They have no difficulty in getting good men of the right type. It is the smaller builders who are having the greatest difficulty.
§ Mr. W. Baxter rose—
§ Mr. Deputy-Speaker (Sir Gordon Touche)
Order. If the noble Lord does not give way, the hon. Member must resume his seat.
§ Mr. Baxter
I am sorry to interrupt the noble Lord, but I think I may help him on this occasion. My hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey) has stated that he thinks that a guaranteed working week in the building industry would help an apprenticeship scheme. In order to put it clearly on the record, I wish to point out 1400 that there is a guaranteed working week in the building industry. The problem is that many of the large firms which come from across the Border and get major contracts in Scotland do not employ apprentice labour. Small local firms are under an obligation to pay for a 32-hour guaranteed week, but most of the small building firms pay for a 44-hour guaranteed week.
The Earl of Dalkeith
I am grateful to the hon. Member for helping me on that. I do not think I should be drawn into becoming a self-appointed arbitrator on this subject.
Finally, I ask if it is possible for the Government to do a little more in the way of research into new techniques in building and new methods. I wonder if we are doing quite as much as we might be able to do by borrowing ideas from abroad, ideas which have been successful, and passing them on to the industry. Prefabrication is an example. There are many ways in which we might make the building industry more efficient than it is, particularly compared with the industry in some of the Scandinavian States and also in the United States. I wonder if the Government could aid research, either directly or by giving assistance to private builders to carry out research.
I do not pretend that the suggestions I have made are a complete answer to the housing problem. They are more in the nature of side issues which I have put forward in the hope that they may contribute in some way to getting on with the job. I think the crux of the housing problem is largely the question of local authority rents. Many of our troubles stem from utter disregard for the economic facts of life. I firmly believe that we must see higher rents, but I think it right that they should be based on some form of rent differential, or preferential, or rent rebate schemes. That works in many parts of the United Kingdom; I cannot see why it should not work in a large part of Scotland. Clause 29 particularly, and other points in the Bill, could help in this respect.
I feel that the Bill deserves the support of hon. Members on both sides of the House who want to see an improvement in Scotland's housing position.
§ 5.45 p.m.
§ Mr. James Bennett (Glasgow, Bridgeton)
It is with a great deal of trepidation that I rise to make my maiden speech, but I am fortified by the thought that hon. Members will listen sympathetically and say to themselves, "There once upon a time stood I."
May I crave the indulgence of the House for a few moments while I pay my tribute to James Carmichael, my predecessor and my friend, who represented the Bridgeton constituency of Glasgow from 1946 until his tragic illness compelled him to retire? While it is with a feeling of great pride that I stand here today, I find that feeling tinged with regret that I am here because of the illness of James Carmichael. I shall endeavour to live up to the very high standards and uphold the traditions set by the late James Maxton and James Carmichael.
I believe it rather unusual for an hon. Member to be sworn in one day and to make his maiden speech on the next. Hon. Members may rest assured that this is not bravado on my part, but because I sincerely believe that I should be failing in my duty if I did not raise my voice in this debate on behalf of the people who have sent me here. My presence here is a direct result of a by-election which was fought last week, a by-election where housing became the overriding issue. Each candidate recognised that; one in particular did not like it.
Last week my hon. Friend the Member for Hamilton (Mr. T. Fraser) told this House of some of his experiences in my constituency. I assure the House that the examples he gave are not isolated cases. The House will be aware that the Bridgeton constituency is a highly industrialised area. It is a classical example of where industry and housing have grown cheek by jowl. In my area one-apartment and two-apartment houses predominate. In far too many cases there is a lack of ordinary sanitation. Conditions exist which are an affront to humanity and a constant reproach to ourselves. In too many families all that is left is hope. I look in vain in this Bill for something which will alleviate or destroy the appalling conditions which exist.
1402 If hon. Members will bear with me, I shall give some figures from the City of Glasgow which demonstrate the urgency of the problem. Almost half the houses in the city have only one or two rooms. More than 400,000 people are living in them, 34,000 people live more than four persons to a room, 90,000 live more than three persons to a room. In May, 1959, there were 328,000 houses in the city of which 55 per cent, were acceptable, 15 per cent, unacceptable but which could be made acceptable, and 30 per cent, which were not capable of being improved and were totally unfit for human habitation.
While finance no doubt has a tremendous influence on housing generally, surely the greatest need is to ensure that our people are decently housed and are not, as so many are, accommodated in squalid conditions. The White Paper on Housing in Scotland contains the statement that the City of Glasgow presents a special problem, and I accept that wholeheartedly. The White Paper talks of overspill as being necessary to help solve Glasgow's problem.
I humbly suggest that if the right hon. Gentleman the Secretary of State would only grant permission to the city council to build on two estates—Darnley and Summerstown, a permission that has been sought for five years—about 10,000 houses could be built and we could thus alleviate, in the near future, the heavy burden that falls on Glasgow. For too long Glasgow has been quoted as being the worst-housed city in Europe. I urge the Government to help us to make a start in destroying that unenviable reputation by removing the cause at its source—the slum dwellings.
I am grateful to the House for the tolerance that has been shown to me. The understanding of hon. Members for me as a new hon. Member, undertaking what in effect is a major ordeal, has helped me tremendously and has prevented the butterflies in my stomach from getting out of hand. I look forward to taking part in future debates with a great deal more confidence.
§ 5.52 p.m.
§ Sir Colin Thornton-Kemsley (North Angus and Mearns)
It is something like 22 years ago that I stood in this Chamber, or in the predecessor of this Chamber, 1403 to make my own maiden speech. On that occasion I had to wait until 8.30 in the evening because two new hon. Members wished to speak in the same debate and I was the junior of the two.
The hon. Gentleman the Member for Glasgow, Bridgeton (Mr. J. Bennett) is to be congratulated on two accounts. Firstly, because his maiden speech is over early. I cannot remember another hon. Member coming to this House one day and making his maiden speech the next, and that is not something of which the hon. Member for Bridgeton need be ashamed. And, secondly, it is very much to his credit that, coming straight from a hard fought by-election, he has not hesitated to rise in his place before he had got the feel of the House—before giving himself an opportunity of hearing the sound of his own voice while putting supplementary questions and the like.
This has happened, I believe, because the hon. Gentleman is filled with that "divine discontent" which his predecessors possessed, and I regard him as being in the line of James Carmichael, Jimmy Maxton, Campbell Stephen and Geordie Buchanan, all of whom were appalled at the housing conditions in the city the hon. Gentleman knows so well and who felt impelled on every occasion possible to rise in the House and to vent their feelings about the housing position in Glasgow in particular and in Scotland generally. I take pride in being the first to congratulate the hon. Member for Bridgeton on a model maiden speech, made from the heart, brief and to the point and giving great promise of many contributions which we look forward to in the future.
Whenever we debate housing I can never forget that we are discussing an intensely human problem; something that touches at its closest point the lives of those whom we represent and our fellow human beings. I apologise to the House tonight because while I would have preferred to have made a less impersonal, a less dull and a less technical speech it is because this is a somewhat technical Bill—and I dare say that many people would call it somewhat dull 1404 —that I intend to be technical and dull myself. I apologise in advance for this because I intend dealing absolutely and entirely with the details of the Bill.
I must first deal with one omission which I regret. When the Rent Act was before the House in 1957 it was provided that the rent of houses which remained subject to control in England and Wales could be raised to a maximum of twice the gross annual value. But because in Scotland we had no recent rating assessments to guide us in this matter, the corresponding Scottish provisions were of an interim nature, owners of controlled property in Scotland being allowed to increase rents by 25 per cent, of the pre-1954 Act rents or by 50 per cent., if they had repaired their house or houses in terms of the Housing (Repairs and Rents) (Scotland) Act, 1954.
Time and again in Committee, and during the Second and Third Readings of that Bill, I urged that provision should be made in the Bill to cover the position after the 1961 rating lists in Scotland were approved. Hon. Members who wish to go into this further will find my words in the OFFICIAL REPORT of 28th March, 1957, where I said that the maximum increase payable in Scotland would be of the order of 4s. a week and the average increase throughout Scotland about 2s. a week, and this at the time when the average male earnings in Scotland were a little over £11 15s. a week.
The point was taken by my right hon. Friend the Secretary of State who, in the Third Reading debate on the Rent Bill, as it then was, said:So far as the rent provisions of the Bill are concerned, the Scottish Clauses take a very different form from those relating to England and Wales. The Scottish Clauses are, frankly, of an interim nature. Until new and uniform valuations, based on the principle of fair rents, are available under the Valuation and Rating Act, 1956, we have no basis on which to build a new rent structure. We in Scotland must therefore continue meanwhile to rely on the Rent Acts and on the Housing (Repairs and Rents) (Scotland) Act, 1954.The changes that the Bill brings about—the new 25 per cent, increase and the revised repairs increase of 50 per cent, of the 1954 recoverable rent—are necessarily limited in scope. Since we cannot at this stage seek to provide a new rent structure and new rent 1405 limits, our object has been, in the changes introduced by the Bill, to make the 1954 Act work better and so to enable as many houses as possible to be kept in, or put into, repair.The Secretary of State later said:These rent provisions are, as I have said, of an interim nature and the Government do not look on them as representing a new rent structure for houses remaining in control. It will be necessary, once the new valuations become available in 1961, to make a fresh and comprehensive review of the position as a whole."—[OFFICIAL RFPORT, 28th March, 1957; Vol. 567. c. 1419–21.]
§ Mr. John Robertson (Paisley)
Do I understand the hon. Gentleman to say that the average earnings of Scottish workers in 1957 amounted to £11 15s.? If so, from where did he get that figure?
§ Sir C. Thornton-Kemsley
Yes, they are official figures. They were obtainable in the Digest of Statistics in either the last quarter of 1956 or the first quarter of 1957. The exact figure of average male earnings in Scotland was a few pence above £11 15s. a week.
§ Mr. Robertson
I think that if the hon. Gentleman carefully examines the figures he will find that he has quoted the figure for the United Kingdom, not for Scotland, because those figures have never been taken out.
§ Sir C. Thornton-Kemsley
The hon. Gentleman is quite wrong; they are the Scottish figures. I used them in debate and checked them myself, and the hon. Member can, by walking to the Library, check them for himself.
The effect of rent controls has unquestionably been to hasten the deterioration of rented houses in Scotland. The process has not been halted by the Government's failure at the time to make realistic provision for houses remaining subject to rent control. We should remember that whereas in England and Wales about 15 per cent, of controlled houses were decontrolled at that time by the rateable value provisions of the Act, the corresponding figure in Scotland was only 8½ per cent, that 8½ per cent, being decontrolled in that way in 1957.
I must confess that I am very disappointed that advantage has not been taken in this Bill today to introduce those permanent provisions.